Business Monitor International


China Mining Report

Published 28 January 2014

  • 116 pages
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  • Includes 3 free updated quarterly reports
 
$1,295.00
China Mining Report

BMI View: T he cooling of China's feverish growth is threatening to turn a decade-long mining boom into bust for many domestic miners. With cost containment being key in the face of falling commodity prices, Chinese miners will be forced to recalibrate their investment approach over the coming quarters. While state-owne d mine s are generally more insulated from the weakness in commodities prices, the Chinese government's gradual embrace of free market economics should pave the way for some much needed consolidation and restructuring in the mining industry.

The transitioning of China's economic growth model from fixed-asset investment to private consumption will create ripple effects across the resource extractive industry. With mineral prices on course to trend lower over the coming quarters, the cooling of China's feverish growth is threatening to turn a decade-long mining boom into bust for many domestic miners. We forecast the country's mining industry to grow at an annual average rate of 5.6% between 2013 and 2017, a sharp slowdown from a growth rate of 17.7% over the previous five years.

China Slows, No More Boom
China - Mining Industry Value

As 2014 ushers in the fourth year of China's 12th Five-Year Plan (2011-2015), we expect the changes and reforms enacted in 2013 to continue. In a bid to curb overcapacity and reduce environmental pollution, the government plans to close smaller and less efficient mines, while mid-sized mines will be merged and production consolidated into giant, vertically integrated state-owned outfits. The small production losses that will inevitably occur with the closure of smaller mines will give way to production gains down the road due to the efficiency gains of bigger, more integrated mining companies.

We expect increasing tax burdens on the Chinese mining industry over the coming years. As evidenced by recent policy measures, China is becoming increasingly concerned about the problem of environmental pollution, especially...

Table of Contents

BMI Industry View
7
SWOT
9
Industry Forecast
10
Bauxite: Pushing For Supply Security
10
Table: China - Bauxite Production Forecast
12
Coal: Digging Continues, Despite Green Push
12
Efficiency Gains With Consolidation Push
15
Table: China - Select Coal Mining Projects
16
Taming Pollution
16
Table: China - Coal Production Forecast
17
Copper: Supported By Self-Sufficiency Push
18
Table: China - Select Copper Projects
19
Table: China - Copper Production Forecast
20
Gold: Growth To Continue On Robust Appetite
20
Chinese Miners Better Insulated
21
Gold Bulls In Asia
21
Compelling Case For Gold In China
22
Struggling To Increase Domestic Output
23
Table: China - Largest Gold Projects
24
Heading Abroad For All That Glitters
25
Table: China - Gold Production Forecast
26
Iron Ore: Growth To Lose Momentum
27
Table: China - Select Iron Ore Projects
32
Table: China - Iron Ore Production Forecast
32
Lead: Autos Sector To Lend Support
33
Table: China - Select Lead Mining Projects
34
Table: China - Lead Production Forecast
34
Nickel: Set For Slowing Growth
35
Table: China - Select Nickel Projects
38
Table: China - Nickel Production Forecast
38
Tin: Yunnan Tin Takes Charge
38
Table: China - Tin Production Forecast
41
Zinc: Little Impetus For Expansion
41
Table: China - Zinc Production Forecast
44
Industry Risk Reward Ratings
45
Risk/Reward Ratings
45
Resource Nationalism On The Retreat
45
Frontier Markets Losing Attraction
45
Table: Asia Mining Risk/Reward Ratings
46
Country Highlights
46
Australia: An Improving Landscape
46
China: Darkening Outlook
47
India: Stumbling Blocks Remain, Despite Reforms
47
Indonesia: Further Policy Moderation Ahead
48
Mongolia: Government Unlikely To Overplay Its Hand
48
Philippines: Taxing Times
49
Japan: Little Potential In Sight
50
South Korea: Few Bright Spots
50
Market Overview
52
Table: China - Mining Industry Value & Production Forecasts
56
Regulatory Development
57
Growing Emphasis On Green Initiatives
57
Table: Asia - Mining Regulatory Scorecard
59
Table: Political Overview
60
Commodities Forecast
62
Commodity Strategy
62
Aluminium: Continued Short-Term Weakness
64
Copper: Recent Strength Doesn't Change Our View
65
Nickel: Recent Strength To Subside
67
Zinc: Price Momentum To Continue
69
Table: Select Commodities - Performance & BMI Forecasts
70
Table: Global Commodities Strategy
71
Competitive Landscape
72
Table: China - Select Listed Mining Companies
73
Company Profile
74
Aluminum Corporation of China (Chalco)
74
Company Overview
75
Latest Financial Results
75
Table: Chalco - Key Financial Data
77
China Shenhua Energy
78
Table: Shenhua Energy - Key Financial Data
80
Jiangxi Copper
82
Table: Jiangxi Copper - Key Financial Data
85
Shandong Gold
87
Table: Shandong Gold - Key Financial Data
90
Regional Overview
91
Asia Overview
91
Global Industry Overview
99
Methodology
111
Industry Forecast Methodology
111
Sources
112
Risk/Reward Rating Methodology
113
Table: Mining Risk/Reward Ratings Indicators
114
Table: Weighting Of Indicators
115

The China Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's China Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in China.

Key Benefits

  • Use BMI's independent industry forecasts on China to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in China's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in China.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

Executive Summary

Summary of BMI's key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Business Environment Ratings

BMI's Mining Business Environment Ratings provide a country-comparative Risk-Reward Ratings index aimed at investors (mining companies and support service providers) in the regional mining market. The ratings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry Ratings products.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2017 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:

  • Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
  • Output:Production volumes ('000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (US$mn) for all major metals, minerals, ores and gems mined in each state .
  • Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI Macroeconomic Forecasts

BMI forecasts to end-2017 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc